Lhe shadow of John Rockefeller hangs like a ghost over the Mountain View campus in California, home of Google. Not that the king of Internet research aims to embark on oil prospecting, like the founder of Standard Oil in the 19th century.e century, but because the same misfortune might well happen to him. The US Department of Justice has officially filed a complaint against Google, along with eight states, including California and New York. And as with Mr. Rockefeller’s oil company, he is asking for the cutting up of a company that has become too powerful. “Google has engaged in a policy of exclusion that has severely weakened, if not destroyed, competition in the online advertising industry,” said Tuesday, January 24 the Minister of Justice, Merrick Garland.
The meticulous investigation of justice (149 pages) brings to light “fifteen years of anti-competitive practices”, in the words of antitrust chief Jonathan Kanter. Like Standard Oil, which had taken control of the production, refining and transportation of oil in the United States, Google is accused of having patiently built a dominant position in all technologies, allowing both sites looking to advertise and advertisers who want to switch to do so within the Google ecosystem. Until auction prices are fixed. In addition, its search engine is one of the first destinations for advertising on the Internet. Analysts estimate that the company attracts a quarter of all online advertising revenue in the United States and half of that spent on search.
Multiplication of surveys
As always in matters of competition law, it is not the dominant position in itself that is in question, but its abuse. The first is simply to eliminate its competitors. The judicial investigation details, for example, the “Poirot project” devised by the firm to systematically discriminate in space purchases against users of auction technology competing with theirs. It can also consist of increasing its prices excessively once the competition has been destroyed. The federal state, itself, would have overpaid for its own advertisements which have cost it $ 100 million since 2019. It therefore relies on its own experience to request that Google separates from a good part of its activities in this domain.
The risk is now existential. Advertising represents nearly 80% of the digital giant’s turnover and it is therefore the heart of its economic model that is targeted. The company has been in the crosshairs of authorities around the world for many years. She had been fined 220 million euros in France, in 2021, and the European Commission is increasing the investigations. In 2020, Texas had filed a complaint with 16 American states. The action of the federal justice portends difficult days for Google. The latter argues that competition is fierce in this business and that its dismantling will penalize innovation and prices. She is betting above all on her best ally, time, like IBM or Microsoft before her. But now the clock is ticking and time is accelerating dangerously.